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Crude falls for fourth day, below $95

Benchmark U.S. oil for February delivery fell 97 cents to $94.47 a barrel in midday trading.

The Associated Press


The price of oil fell for the fourth consecutive day, below $95 a barrel, as a rebounding U.S. economy drove the dollar higher and signs continue to emerge that there is an ample supply of crude worldwide.

Benchmark U.S. oil for February delivery fell 97 cents to $94.47 a barrel in midday trading. Brent crude, used to price international crude processed by many U.S. refineries, fell 86 cents to $106.92 a barrel in London.

U.S. crude fell by $2.98 on Thursday, the biggest one-day drop since November of 2012. Prices have been dropping sharply since last Friday, when a barrel closed above $100 for first time since October.

A financial recovery in the U.S. would typically drive commodities higher, given the appetite of the world's largest economy. But that recovery has been driven in part by a massive bond-buying program at the Federal Reserve.

The Fed recently began winding that program down, however, and that is pushing the value of the dollar even higher.

A stronger dollar makes commodities such as oil that are priced in dollars more expensive for buyers using other currencies.

Demand is rising, but supplies appear to be sufficient. The Energy Department reported Friday that average petroleum demand over the past four weeks rose 3.3 percent compared with last year. While oil stocks fell by 7 million barrels, that is "above the upper limit of the average range for this time of year," according to the weekly status report.

The national average retail price of gasoline edged up less than a penny to $3.33 per gallon, according to AAA, OPIS and Wright Express. That's the highest level ever for this time of year — 5 cents higher than last week and 4 cents higher than a year ago.

And there is a chance that additional sources of crude may soon become available.

There is a Libyan oil field that could add 300,000 barrels of daily production to the global market place, further diluting prices.

Libya remains unstable, however, and on Sunday a militia group that shut down most of the nation's oil terminals for months threatened to cut off natural gas deliveries to the capital.

Many Libyan energy facilities have not been unable sustain full production since the 2011 civil war.

"While recent announcements of a similar nature have failed to materialize and the situation in the east of the country remains in a deadlock, the potential of additional sweet crude supplies are serving to weigh further," JBC Energy said from Vienna.

In other energy futures trading:

— Wholesale gasoline fell 3.4 cents to $2.661 a gallon.

— Natural gas rose 5.8 cents to $4.354 per 1,000 cubic feet.

— Heating oil fell 2.9 cents to $2.958 a gallon.

AP Writer Pablo Gorondi contributed to this report from Budapest.

The Trucker staff can be reached to comment on this article at editor@thetrucker.com.

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